Wisconsin has been reducing investments that give families access to high-quality child care, a move that will hurt children’s school-readiness and success in later life.
The state legislature’s freeze on child care payments – payments that help make it possible for parents who work at low-wage jobs to work – has taken a negative toll on parents, children, and child care providers, according to a new report from the Wisconsin Council on Children and Families. The legislature has frozen payment rates for the past seven years, with the effect that providers are dropping out of the program, and parents are having difficulty finding the child care they need in order to work.
The reduced investments in child care stand in stark contrast with Wisconsin’s past approach to helping low-wage parents get the child care they need. In 2006, before the rate freeze, the maximum payment rate covered 75% of child care slots statewide, according to the report. After seven years of frozen rates, the maximum payment rate covered only 23% of child care slots.
The freeze on child care rates has had a major negative impact on the bottom lines of child care providers, which are a mix of for-profit businesses, non-profit organizations, and self-employed individuals. The report shows how much more child care providers would be receiving if child care payments reflected marketplace realities. The difference is significant. According to the report, “The annual losses per child range from $500 to $3,450 in the counties with the most children. And the more low-income children a program serves, the greater the loss in Shares payments.”
Given the difficulties of making a business run in the face of these losses, it’s no surprise that the number of child care providers participating in Wisconsin Shares is sharply down. About a third of providers have dropped out the program over the last four years, and the number of children has dropped as well. The current state budget provides a small rate increase to some child care providers, but it’s a matter of too little, too late for the providers who have left the program – and the working families those providers served.
If Wisconsin wants to boost school readiness and insure that children have a solid foundation for a life of learning and work, investing in high-quality child care is a great place to start. Skimping on investments in child care hurts children, working parents, and child care providers, in both the short-term and the long-term.
The full report by WCCF is here: The Impact of the Seven-Year Freeze of Child Care Payment Rates.